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Rani Molla

Google soars after analysts charmed by developer conference

Wall Street analysts were generally impressed with Google’s two-hour developer conference yesterday, in which execs crammed its Gemini AI into basically everything.

Today the stock is up more than 5%. Here are some comments from a few of their notes:

JPMorgan: “We come away from Google I/O incrementally positive as we believe Google is leading in many areas of AI with Gemini at the top of foundational model leaderboards, AI Mode bringing Gemini into Search and incorporating agentic capabilities from Astra, Mariner, & Deep Research, and Gemini becoming widely available across numerous platforms (iOS & Android) & device types (smartphones, wearables, & auto). Importantly, Google’s product innovation is accelerating — the company is shipping faster than ever — and AI Mode in Search is rolling out to US users just 1 year after AI Overviews were introduced. We believe Google’s ‘total reimagining of search’ is taking shape as AI Mode integrates what have been somewhat disparate AI products.”

Morgan Stanley: “I/O showed how GOOGL intends to make search more AI-enabled, personalized, and agentic in ’25. Next gen (subscription, diffusion and devices) tools are improving too but for now we are most optimistic on the free pipeline of products to come.”

Bank of America: “We think the catch-up phase for Google’s LLM capabilities is coming to an end... We see this as Google’s ‘Reels moment,’ taking on a growing and well-funded competitor in OpenAI by integrating a directly competitive product [AI Mode].”

Evercore ISI: “We don’t believe there will be only one AI winner, but we think Google has successfully proven that it will remain a leader in the AI race.”

Baird: “It’s a tough and competitive landscape, but Google’s global scale, infrastructure, and suite of apps are meaningful competitive advantages.”

Rosenblatt Securities: “While impressive, the event was also a reminder that Google is stretching to parry huge strides by rivals that were nowhere just a couple of years ago.”

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Earnings season a chance for AI hyperscalers to “get their mojo back”

Hyperscalers need more “hype” on their potential AI moneymaking opportunities or to show that their “scale” continues to drive huge growth through this spending binge.

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Matt Phillips

Active ETF offers exposure to Elon Musk’s SpaceX

Active ETF Baron First Principles ETF has added a large stake in Elon Musk’s privately held SpaceX, with daily disclosures of the active ETFs holdings on Friday showing SpaceX now makes up 22% of the fund’s portfolio.

Such a stake would open up a potentially big opportunity for those looking to get access to some of the eccentric billionaire’s privately held business empire, ahead of any public offering of the shares — which is reportedly in the works for this year.

Run by mutual fund manager Ron Baron, the ETF also owns stakes in other Musk vehicles such as privately held xAI and publicly traded Tesla. The fund — which has only been trading since December 15 — is down slightly on the day.

markets
Luke Kawa

AMD jumps as Intel’s supply constraints offer chance for CPU market share gains

As investors react negatively to Intel CEO Lip-Bu Tan’s warning that the chipmaker’s turnaround effort will be a “multiyear journey,” that cautionary note is also a reminder that Advanced Micro Devices has more time to make hay while the sun shines.

AMD had been one of the companies with the most to lose should attempts by the government and Nvidia to prop up the beleaguered chipmaker bear fruit. In particular, Intel and AMD are locked in a fierce competition in the CPU market. During its earnings call on Thursday, Intel said that supply constraints were preventing the company from realizing strong demand.

JPMorgan analyst Harlan Sur thinks that gives AMD more room to continue to muscle in on Intel’s CPU turf.

“We still view Intel as being at risk of further share loss in its product businesses (particularly in server CPU given AMD’s strong product portfolio/roadmap and Intel’s supply constraints),” he wrote.

AMD is up nearly 3% as of 11:40 a.m. ET, working on its ninth straight day of gains. A positive close would match its longest winning streak since 2005.

markets
Max Knoblauch

Spotify climbs following an upgrade from Goldman as it prepares to hike prices

Music streamer Spotify climbed about 3% on Friday following an upgrade to “buy” from “neutral” from Goldman Sachs.

The upgrade comes ahead of Spotify’s already announced US subscription price hike next month — its third since 2023. Goldman lowered its 12-month Spotify price target to $700 from $735.

“We are surprised how negative investor sentiment has turned with respect to [Spotify] on the back of the AI theme. In our opinion, we see SPOT as well-positioned to capitalize on/benefit from rising generative AI adoption,” Goldman said in its Friday note, adding that it’s watching how the rise of AI music platforms could impact Spotify and its music royalty payment structure.

Earlier this month, Morgan Stanley published a survey that found up to 60% of Gen Z respondents listen to AI music, for an average of three hours per week. Last week, Bandcamp announced it would ban AI music on its platform.

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